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Proactive Trades, May 7th, 2018 – AAPL, FDX, LULU

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The main pivot level to watch now is based from the previous newsletter:

And if the market manages to clear and hold 2680, then we’ll assume a move to 2800 is on deck.

Today, 2680 was breached, but it didn’t hold. For me, the logic is simple. If we can manage to hold above that, then we’ll be off to the races.

And a test of the 200 day moving average would signal SIGNIFICANT technical deterioration.

Where we stand right now… the past month has been an ever tightening range and we should expect volatility expansion sometime soon.

Trade #1: AAPL

Great rip after its earnings. It’s overbought in the short term and put in a reversal candlestick (open and close at the low of the range).

I’d like to see a pb2bo, pullback to breakout. The breakout bar from yesterday… at the 50% level of that bar is where I want to start. If hit, it will also coincide with some short term rising moving averages as well as the 1st std dev upper bollinger band (not shown).

Trade Setup

Expected Price: 181.21

Sell to Open Jun 170/165 Put Spread

Tier 1: Enter at 0.65, Exit at 0.15

Tier 2: Enter at 0.95, Exit at 0.45

Tier 3: Enter at 1.25, Exit at 0.75

 

Trade #2: FDX

I’m looking for a stop run under the 200 day moving average and a test of the range lows. We would need to see some REALLY nasty price action, but if it happens quickly I want to be involved.

Trade Setup

Expected Price: 225

Sell to Open FDX Jun 220/210 Put Spread

Tier 1: Enter at 2.25, Exit at 0.80

Tier 2: Enter at 3.00, Exit at 1.50

No Tier 3

 

Trade #3: LULU

I’ve been trying to get a reentry into LULU and now that it’s seen a BIG pullback, I’m looking for a second leg lower into retracing 1/3 to 1/2 of the most recent rally.

Trade Setup

Expected Price: 93

Sell to Open LULU Jun 82.50/80 Put Spread

Tier 1: Enter at 0.45, Exit at 0.10

Tier 2: Enter at 0.60, Exit at 0.35

Tier 3: Enter at 0.75, Exit at 0.50

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